The answer is yes and yes. But like all things legal, these options require a real estate attorney used to conferring with your Lang Realty agent on complex issues. Here’s some initial steps and considerations.
How to buy a house under an LLC:
If you already own a Limited Liability Company, make sure you meet all local and state requirements. Then, even before you identify a lender, prepare to prove your LLC is capable of repaying the mortgage. If you’re planning to form an LLC first, the cost in Florida ranges from $125 to $538.
Pros and cons of buying a house under an LLC:
The LLC will own this property, not the buyer. So do the math and make sure it’s worth it financially. On the plus side, your LLC could take advantage of FHA loan programs and lower transfer taxes. There may be property tax benefits or loan interest deductions, too. But on the downside, when you buy real estate using an LLC, you still owe taxes on income the property generates if you rent or sell later.
How to buy a house under a trust:
There’s even more to consider here, such as tax and probate implications, depending on the type of trust involved. In Florida, the two most common are land trusts and revocable living trusts. REITs, otherwise known as Real Estate Investment Trusts, are formed to make income-producing real estate investments.
Pros and cons of buying a house under a trust:
Using trusts has “gained notable traction in Florida…not only among wealthy investors but also among middle-income families looking to protect their homes and investments,” according to legal experts. The primary reason is probate protection. But trusts are subject to much higher taxes, so again the question is whether it pays to buy real estate using a trust vs. traditionally. It’s a big decision.
